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Modern Startup Financing by Carolynn Levy

Startup School by Y Combinator

CHAPTER

Early Stage Fund Raising Using Convertible Securities

Convertible securities are not stockholders. It's very hard to tell how much ownership of your company you have sold. Investors write smaller cheques, they don't care as much about the investor thenot stockholders yet. This is a double edged sword. Sometimes investors can drive you insane, but sometimes they can be really helpful,. They will make introductions for you. They'll help you with strategic advice. The whole point, as i said before, is focus. If you don’t have to spend a lot of time negotiating documents, if you can get money in the bank really fast, you can go to building your back-up business. Safes and convertible securities

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